RMC - no surprises say Merrill Lynch

12 February 2004

Post the trading statement in December, there should be few surprises in 2003, says analysts at Merrill Lynch, although the precise timing of the Adelaide Brighton sales, inter-co debt repayments could mean some changes to forecast details. But Merrill expects attention to focus on the state of the German price recovery (how have cement prices risen, ready-mix prices have lagged?) and even volume prospects.

New CEO David Munro is likely to be queried on future size and shape of the group, more disposals (Germany?) and acquisitions or cash returns to shareholders. Risks are the usual trio of economic growth, fuel costs and currency (around 25% exposure to USD) plus specific issues on German pricing, UK cement operations and cost cutting, plus strategic direction now balance sheet is restored.